What did Tim Draper see in Elon Musk that others missed? The early Tesla and SpaceX backer on the $2 trillion IPO, xAI, and the coming AI shakeout.
SpaceX's blockbuster IPO this year created billions in paper wealth. Shares climbed 19% after Wall Street's biggest-ever debut, valuing the company at more than $2 trillion. Silicon Valley has spent the months since explaining why the outcome was inevitable. American venture capital investor Tim Draper, however, remembers a different version, one that starts with his firm writing one of the earliest checks into the company, and watching it burn.
"We were the first investor after Elon, who put 30 million of his own money in. The first two rockets after we invested blew up on the launch pad," Draper tells me in an exclusive conversation. "Then there was a successful launch and customers lined up. He could launch a rocket for one two-hundredth of the cost that NASA was launching rockets, and boy, he found a lot of interesting, good customers."
That gap between the smoking launch pad and the celebrated IPO is where Draper says the entire venture business actually lives: the stretch where conviction has no evidence behind it, the losses arrive before the proof does, and most investors refuse to go. Big venture returns, he argues, demand a willingness to back the uncertain.
